On the official Prime Minister’s Office website, a 2023 document titled “First Year of Doubling Asset Income: From Savings to Investment“ features a message from former PM Kishida. It boldly declares the government’s intent to shift household assets from stagnant savings into active investments, touting the “New NISA” and the expansion of iDeCo (Individual Defined Contribution Pension Plan) as the primary engines for this transition.
But why is the LDP-Komeito coalition so obsessed with pushing citizens into the stock market? While the internal politics remain opaque, I see three primary motivations:
1. Using Stock Prices to Substitute for Real Income
The government hopes that by moving household cash into stocks, the benefits of rising corporate values will be returned to households, eventually leading to more consumption. Since stock prices have generally trended upward since 2013, they are essentially telling households: “Since your wages aren’t rising, try to survive on capital gains instead.”
2. Offloading Future Social Security Risks
The “shortage” of pension funds is often cited as the primary reason for Japan’s “deteriorating” national finances. Knowing that raising taxes or social insurance premiums will trigger a voter backlash, the government is essentially saying: “We can’t take care of your future, so please handle it yourselves through investment.” Of course, as someone who understands credit creation, I view these “shortages” and “deteriorations” with heavy skepticism.
3. Catering to the Business Lobby (Keidanren)
While personal consumption has stagnated for decades, large corporations and executive compensations have hit record highs. If the government truly wanted to redistribute wealth, the simplest solution would be raising corporate tax rates or abolishing consumption tax rebates for exporters. Instead, the business lobby has likely convinced the government that “encouraging households to buy our stocks” is the best way to achieve “co-prosperity.” It is also highly probable that financial institutions are lobbying for iDeCo expansion to create new business opportunities.
The Fundamental Flaw: Putting the Cart Before the Horse
To be clear, it is generally good for households to hold some stocks. In a low-interest-rate environment, building assets solely through bank interest is nearly impossible. Furthermore, understanding the stock market helps citizens spot “get-rich-quick” scams more easily.
However, the core issue is stagnating income. This is the root cause of the anxiety mentioned in point (2). By pushing a “Savings to Investment” mantra without addressing the lack of disposable income, the government is effectively promoting further austerity. People cannot invest if they don’t have surplus funds.
Using tax breaks for NISA and iDeCo while the economy remains in a long-term slump is a policy failure of the highest order. If the government has the fiscal space to fund these tax breaks, they should instead prioritize cutting the consumption tax or income tax. Tax incentives for asset formation should only come after incomes have started to rise significantly.
A Rare “Maybe” for Platinum NISA?
In 2025, the government proposed “Platinum NISA,” which allows “monthly distribution-type” investment trusts—products previously excluded from NISA for being unsuitable for long-term growth. Online critics are up in arms, claiming it’s wrong to push seniors into risky investments. However, I believe these critics miss the point.
For seniors, monthly distributions can actually be rational. They want to protect their principal while having a steady stream of “pocket money” to spend. If “Platinum NISA” encourages the elderly to spend their distributions, it could provide a minor tailwind for the economy.
But the fatal flaw remains: the moment the economy shows a glimmer of hope, this administration immediately rushes toward tax hikes and “reforms” (cuts) to social security. Without addressing the twin pillars of income growth and avoiding austerity, any other policy is merely a distraction.
Postscript: A Linguistic Oddity
In Japanese, “Savings” (貯蓄 – Chochiku) literally means “accumulating money” and technically includes investments. Therefore, the slogan “From Savings to Investment” (Chochiku kara Toshi e) is linguistically awkward. It should be “From Cash Deposits to Investment” (Yochokin kara Toshi e). Why does the government insist on using such clumsy Japanese? Perhaps it sounds more poetic to those who don’t understand the definitions.
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